TORONTO – Rogers Communications delivered a bit of a surprise to Bay Street late Monday afternoon with more positive first quarter results than some were predicting.
Revenue in the quarter ended March 31, 2011 increased 4%, compared to Q1 2010, to $3 billion, wireless net post-paid additions came in at 45,000 and a record number of new smartphones (534,000, compared to 348,000 in Q1 ’10) were added to its grid via new smartphone customers and others upgrading their handsets. Wireless data revenue growth also stayed strong at 30% ($542 million) and margins were 49%.
The company also noted that wireless data revenue now comprises 34% of its wireless network revenue since subscribers with smartphones typically generate ARPU nearly twice that of voice only subscribers.
"The first quarter results represent a healthy start to 2011 for Rogers," said Nadir Mohamed, president and CEO, in the press release.
The growth in wireless data revenue “reflects the continued penetration and growing usage of smartphone and wireless laptop devices which are driving increased usage of e-mail, wireless Internet access, text messaging and other wireless data services,” points out the press release.
Plus, smartphone additions are “concentrated in the higher end of the market,” added Mohamed, in his conference call with analysts Tuesday.
On the cable side, revenue for the three months ended March 31, rose 3% compared to last year’s Q1, to $813 million while operating profit jumped 16% to $392 million.
The company has 2.303 million basic cable subs and enjoys 76% digital penetration.
High speed Internet revenue and customers continued to climb, rising 10% to $224 million, however home phone revenue dropped 5% to $121 million as the company continued to migrate legacy circuit-switched telephony customers left over from the 2005 acquisition of Sprint Canada.
On the TV and radio front, Rogers Media, the division enjoyed a 17% increase in revenue (to $339 million) thanks largely to the subscription fees rolling in from the addition of the Rogers Sportsnet One sports channel and increased ad sales.
However, because of the high end sports properties filling out the new schedules (NBA and NHL) expenses were also up, resulting in a $15 million operating loss, down from a $1 million OP in Q1 2010.
